Don’t Worry Bond Investors, Baby Boomers Have Got Your Back
- HSBC report sees aging population supporting demand for bonds
- Debt already accounts for more than half of pension holdings
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Investors mourning the end of a 30-year bull market in U.S. Treasuries can take solace from demographics: thanks to the aging population there’s a limit to how high yields can go.
Over the next decade, as more of those born in the baby-boom period following World War II get closer to drawing their pensions, global demand for bonds and cash will rise and allocations to equities will fall, according to analysts at HSBC Global Research. That’s because people get more risk averse as they get closer to retirement, shifting out of stocks and into fixed-income investments.